10 ways to survive the recession with a credit union

As the recession starts to bite, many of us will be wondering how we're going to make ends meet in the run up to Christmas. ABCUL - the Association of British Credit Unions - has put together its Top Ten Tips for how a credit union can help you through these tough times.

"Credit unions are financial co-operatives owned and run by their customer members," explains CEO Mark Lyonette. "They're not controlled by anonymous City shareholders and they don't gamble with their customers' cash on international money markets. Members of a credit union know their money is in safe hands - their own."

ABCUL's Top Ten Tips

1. Flexible savings products - every penny counts and credit unions offer a wide range of flexible and accessible savings accounts. Unlike some other savings schemes, you can save as much or as little as you like and as often as you wish. You can pay in at local shops and collection points, or direct from your wages which is pain-free and convenient. Even saving a small amount each week soon mounts up.

2. Lower cost loans - if you need to borrow some money to get you through, then credit unions offer some of the best deals around. Many credit union loans cost no more than 1% a month on the reducing balance of a loan (APR of 12.7%). There are no penalties for repaying a loan from a credit union early and borrowers only pay interest for the amount of time they've had the money.

3. Credit Union Current Account - offers a debit card which can be used in shops and to withdraw money from cash machines, and account holders can set up standing orders and direct debits, which can save money when paying utility bills, for example. Charges are upfront and transparent, and there are no overdraft facilities, meaning people are less likely to get into trouble financially. The current account will be available in 18 credit unions by the end of the year.

4. The Argos Acard - many ABCUL credit unions offer the Argos Acard, an exclusive payment card that can be topped up from a credit union member's savings, or a loan, and spent at Argos and Homebase stores. Every time a member tops up their Acard, Argos add another 5% to the value, so if you put £300 on the card from a credit union loan, Argos will add another £15.

5. Christmas Savings Club - a safe way to save for the most expensive time of year. Make regular deposits and get a lump sum in time to do your Xmas shopping - a valuable alternative to voucher saving schemes, particularly in light of the Farepak collapse.

6. Mortgages - A couple of the bigger credit unions now offer highly competitive fixed rate and variable rate mortgages. With access to mortgage funding from banks getting harder and harder to come by, a credit union might have the solution you need.

7. Life insurance - built in at no extra cost when you take out a credit union product. This means that savings can be as much as doubled, or loans written off, in the event of a member's death.

8. Money management advice - many credit unions offer free money advice and useful information on how best to manage your finances. Don't put your head in the sand - drop into a credit union and get some help.

9. Financial Services Compensation Scheme - credit unions offer the back up of the Financial Services Compensation Scheme (FSCS) so the first £50,000 of your money is completely protected.

10. They're local and owned by you, the customer!

So when the recession starts to bite, head down to your local credit union and see what they can do for you...

To find out more about credit unions and to get contact details for one in your area, visit abcul.coop